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CAIRO (Zawya Dow Jones)--Saudi British Bank, or SABB (1060.SA),
HSBC Holding PLC's (HBC) local affiliate, said Wednesday its
fourth-quarter net profit plunged 96% year-on-year to 26 million
Saudi riyals ($6.9 million) after it made more provisions for bad
loans.
The result was well below the SAR670 million billion analysts at
Shuaa Capital had penciled in.
Full year earnings per share came in at SAR2.71 compared with
SAR3.89 a year ago, SABB said in a statement posted on the Saudi
bourse Web site.
The firm posted a 2.2% drop in fourth-quarter operating profit
to SAR1.19 billion.
SABB's 2009 net profit came in at SAR2.03 billion versus SAR2.92
billion a year earlier.
"The decreased net profits…are mainly due to the increase in
provisions in line with SABB's continued conservative policy to
enhance its financial position," said Richard Groves, the lender's
managing director.
The Riyadh-based bank didn't elaborate on the provisions it
took. In the third quarter of 2009, it posted SAR351.5 million in
provisions for loan losses after it booked SAR314.4 million in
provisions for loan losses in the second quarter and SAR116.29
million in the first quarter.
Saudi banks are expected to continue facing financial headwinds
as loan-loss provisions continue to weigh on balance sheets.
The banks were also hard hit by their exposure to financially
troubled Saudi conglomerates Saad Group and Al Gosaibi. Saad,
controlled by Saudi billionaire Maan Al Sanea, and Ahmad Hamad Al
Gosaibi & Bros. Co., or AHAB, began to face scrutiny in May
after they failed to meet some of their debt obligations.
Loans and advances to customers were SAR76.4 billion as of the
end of the year, down 4.7% from 2008, and customer deposits fell
3.8% to SAR89.2 billion during the same 12-month period.
SABB's investment portfolio stood at SAR23.8 billion as of Dec.
31, compared with SAR29.6 billion in 2008, while total assets
declined 3.7% to SAR126.8 billion.
-By Summer Said, Dow Jones Newswires; 2010- 990-9593;
summer.said@dowjones.com